Some Rules of Thumb

The development of any restaurant requires a careful look at the financial projections. With that in mind, here are a few Rules of Thumb:

Sales to Investment
(Annual Sales/Start-Up Costs)
Lease Hold Improvement - at least 1.5 to 1
Own Land & Building - at least 1 to 10

Food Coat
Generally - 27% - 32%
However, some very successful restaurants have food costs as high as 40%

Prime Cost
Full Service - 65% of total sales
Limited Service - 60% of total sales

Occupancy & Rent
Rent - 6% or less of total sales
Occupancy - 10% or less of total sales.

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